Many small companies are able to drop employee health insurance plans (Photo by David McNew/Getty Images)

Many small companies are able to drop employee health insurance plans.

Small Businesses, Contractors May Legally Drop Health Insurance Plans

Many contractors and small businesses across multiple industries have seen their health insurance rates skyrocket each year. Now, according to NPR, many small companies are dropping their employee health insurance plans.

This is because of the Affordable Care Act, as many small businesses are able to purchase individual plans for managers. Businesses with fewer than 50 employees, which NPR said provides coverage for 20 million U.S. citizens, have no obligation to offer health coverage.

Owners don't have to pay premiums, meaning they can give workers raises, invest in equipment or add to profits instead. And employee take-home pay can rise if subsidies — available even to families with middle-class incomes — are worth more than what a company was contributing.

Whether to cancel a company plan and let workers buy insurance on HealthCare.gov or another online exchange "is something that I would say comes up in every conversation with a small-group" employer, said Adam Berkowitz, a consultant with Caravus, a benefits firm based in St. Louis.

"I just had another [small] business call in today and say, 'You know, we can't do it. We're packing it in,'" said Roger Howell, head of Howell Benefit Services in Wilkes-Barre, Pa.

Read more about NPR’s story on small business health coverage or read out interview with Charlie McCrudden, senior vice president of government relations for the Air Conditioning Contractors of America, who believes parts of the ACA may be overturned under the new Congress.

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